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Korea has long way to go in cloud computing

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Visitors to the AWS Summit look around a showroom that displays Amazon's smart home devices at COEX, southern Seoul, Wednesday. / Korea Times photo by Baek Byung-yeul
Visitors to the AWS Summit look around a showroom that displays Amazon's smart home devices at COEX, southern Seoul, Wednesday. / Korea Times photo by Baek Byung-yeul

By Baek Byung-yeul

Scores of people formed a long line at the COEX convention center in southern Seoul Wednesday to see the latest trends and services using cloud computing technology of Amazon Web Services (AWS).

AWS is a cloud computing business unit of the U.S. retail giant Amazon, and has dominated around one-third of the global cloud computing market. To promote its services, AWS has held its annual cloud computing exhibition called AWS Summit throughout the world.

The cloud giant also launched its Seoul event in 2015 and the two-day event has grown into one of the largest exhibitions in the IT industry here as more than 22,000 people pre-registered for this year's show. AWS Korea said about 70 partner companies also joined.

Meanwhile Korean firms have remained mere spectators, struggling to get a bigger chunk of the country's emerging cloud computing market.

Korea's cloud computing market is expected to grow as more and more companies are accelerating their migration process to cloud computing to reduce costs and launch enhanced services based on the latest technologies.

According to January data from the Korea Development Bank, the local public cloud computing market is projected to grow to 2.44 trillion won ($2.2 billion) in 2019, a 22 percent increase year-on-year, but domestic operators such as KT, Naver, SK C&C, LG CNS and Samsung SDS have occupied only about 30 percent, leaving the rest to foreign operators such as AWS, Microsoft and IBM. Given Google recently announced it will establish a region ― a set of data centers ― in Seoul in early 2020, the domestic operators are expected to face even tougher competition in the near future.

Among those top players, AWS has dominated the country's cloud computing market. Though its Korean unit didn't reveal the exact figure, industry officials presume AWS logged more than 800 billion won in sales in 2018.

AWS Korea, which has been operating here since 2012, has secured more than 600 corporate clients. It said the number has increased by 30 percent year-on-year. The partner firms include not only startups but also IT service arms of large-sized companies such as LG CNS, Nongshim Data System (NDS) and Hyundai Movex.

Officials from partner firms at the AWS Summit said they couldn't expand their business further without using AWS cloud computing services that enables firms to develop, run and manage applications without the complexity of purchasing and maintaining the IT infrastructure.

They added they didn't consider using local operators' services because there is no reason not to choose the cloud computing service provided by the market leader.

Domestic operators are seeking a breakthrough in the financial sector as the government has loosened regulations that prevented the adoption of cloud computing technology. The Financial Service Commission (FSC) announced a revision to regulations supervising electronic finance to allow financial firms to store sensitive customer information on the cloud starting January.

Also, they are trying to form partnerships with the foreign companies to focus more on providing a cloud system integration market. LG CNS recently said it will offer management services for cloud computing platforms provided by the global cloud platforms such as AWS.

However, an industry official said it will be difficult for local cloud service providers to expand their footprint because of lack of competitiveness. "Our company used both Microsoft's Azure and AWS cloud computing services and decided to use only AWS because it has better business tools and support programs. As an IT engineer, I think it is difficult not to use the market leader's service," the official said.

An expert said Korea still has a long way to go to get the country ready to play against foreign players in the cloud computing market because it lacks not only the IT infrastructure but also talented engineers who can manage operations.

"To become a competitive cloud computing player, there should be more computer engineers that can deal with system management but Korea has neglected to train talented individuals in the sector," said Park Sang-oh, a professor at the School of Computer Science and Engineering at Chung-Ang University. "Those engineers are needed when developing cloud computing related systems and managing these systems, but Korea has deemed them less important."

To attract more engineers to their cloud computing services, the professor pointed out companies are required to offer entry-level education for their services. "Even in many universities, students majoring in computer science are learning AWS skills simply because these skills are more useful when they apply for jobs," he said.


Baek Byung-yeul baekby@koreatimes.co.kr


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